Bears Power Oscillator Explained and Backtested Strategies

The Bears Power Oscillator Tests the Strength of Bearish Forces.

Alexander Elder’s Bears Power Oscillator is included in the MetaTrader package, but it does not garner the amount of attention that other indicators receive. The Bears Power Oscillator allows traders to judge who is winning out during the trading day: Buyers or Sellers. The calculation is quite simple, but it is an elegant oscillator that provides insight into bearish reversals and continuations.

Calculating the Bears Power Oscillator

Bears Power as the difference between the lowest price and 13-period exponential moving average (LOW – EMA).

Simply put: Bears Power is the Low of a Candle on any time frame chart and subtracting it from the 13 Exponential Moving Average.

Strategy #1: Bears Power Oscillator Zero Line Cross Strategy

Timeframes: 1 Hour and 4 Hour Charts

Currencies: USDJPY and EURUSD

Indicators: Bears Power Oscillator with Period of 13.

Long Entry: Bears Power Oscillator turns from negative to positive.

Short Entry: Bears Power Oscillator turns from positive to negative.

Long Exit: Bears Power Oscillator turns from positive to negative.

Short Exit: Bears Power Oscillator turns from negative to positive.

EURUSD 1 Hour Chart

USDJPY 1 Hour Chart

EURUSD 4 Hour Chart

USDJPY 4 Hour Chart

Strategy #2: Bears Power Oscillator in Modified Triple Screen Method

Timeframes: Trade on a 4 Hour Charts

Currencies: USDJPY and EURUSD

Indicators: Bears Power Oscillator with Period of 12 on a 4 Hour Chart. Bears Power Oscillator with Period of 10 on a Daily Chart. EMA of 50 on a Daily Chart.

Long Entry:

Bears Power Oscillator on the 4 Hour Chart turns from negative to positive.

The Moving Average must be higher than it was 22 days ago.

The Moving Average must be below the Low of the Current Day.

Bears Power Oscillator on the Daily Chart is positive.

Short Entry:

Bears Power Oscillator on the 4 Hour Chart turns from positive to negative.

The Moving Average must be lower than it was 22 days ago.

The Moving Average must be above the High of the Current Day.

Bears Power Oscillator on the Daily Chart is negative.

Long Exit: Bears Power Oscillator on the 4 Hour Chart turns from positive to negative.

Short Exit: Bears Power Oscillator on the 4 Hour Chart turns from negative to positive.

Strategy #3: Bearish Engulfing with Bears Power

Timeframes: Trade on a 1 Hour Chart

Currencies: USDJPY and EURUSD

Indicators: Bears Power Oscillator with Period of 13 on a 4 Hour Chart.

Short Entry:

Bears Power Oscillator on the 1 Hour Chart turns from positive to negative.

Bearish Engulfing Pattern

Short Exit: Bears Power Oscillator on the 1 Hour Chart turns from negative to positive.

EURUSD 1 Hour

USDJPY 1 Hour

Bears Power Oscillator Thoughts

This is an indicator that needs some more experimentation into terms of creating a strategy. Certainly, there are better ways to use it, but they just were not found in the creation of this article. However, there are better strategies out there and you should definitely use more than one. There’s no Holy Grail that will carry you to profits, but a diversified approach will do you good.

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